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October 29, 2010

Economist: SBY's feet of clay

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Banyan

SBY's feet of clay

Supposed to come into his own in his second term, Indonesia's president is looking even less like his own man

Oct 21st 2010

BEFORE last year’s elections in Indonesia, supporters of the incumbent president, Susilo Bambang Yudhoyono, predicted that victory would lead to a markedly different second term for their champion. A mild-mannered ditherer, he would emerge triumphant and transformed, as a bold and decisive reformer: Super-SBY! Sure enough, his Democrat Party became the largest in parliament and Mr Yudhoyono was re-elected in a landslide. But, as Indonesia marked the first anniversary of his second inauguration on October 20th, SBY2 was looking very much like SBY1. Indeed, in some ways it looks worse. Even some of Mr Yudhoyono’s fans admit to being disappointed.

That might seem harsh. Under his presidency, Indonesia has become a success story. In November Barack Obama will return to Indonesia, his childhood home and the country that has more Muslims than any other, to pay his respects to a flourishing democracy and bastion of tolerance. Protests marked this week’s anniversary with calls for Mr Yudhoyono to resign. But opinion polls suggest that he remains a popular president, though his once sky-high approval ratings have fallen. Even some environmentalists, traditional thorns in the flesh of Indonesian governments, like him: Mr Yudhoyono having declared a two-year moratorium on large-scale clearance of the country’s rainforests from January 2011.

More broadly, Indonesia’s global stature is rising. The public finances are sound and the economy has sailed through the financial crisis. Among G20 economies, only China and India grew faster than the 4.5% Indonesia achieved last year. In 2010 the rate is likely to be close to 6%. That would have seemed almost unimaginable 12 years ago, when the economy collapsed and Indonesia’s longstanding dictator, Suharto, fell.

Yet it is not churlish to look for more. Indonesia is underperforming. A recent “strategic assessment” by the Kennedy School of Government at Harvard University concluded that it is losing ground to its neighbours. Its resilience during the global downturn was in part caused by its skipping the pre-crisis trade boom. Its recovery has been pulled along by Chinese hunger for commodities—notably coal and palm oil. With its wealth of resources, and young population, Indonesia should achieve respectable rates of growth for decades. But respectability will not create enough jobs, let alone secure Indonesia’s aim of becoming “an advanced and self-reliant nation by 2025”.

Many development indicators are bad. In terms of GDP per person, for example, Indonesia is much richer than Vietnam. Yet an Indonesian mother is over three times more likely to die in childbirth than a Vietnamese mother. And her child is nearly three times more likely to die before the age of five.

An important step the government could take to improve things would be to spend less on wasteful subsidies—which account for at least half of its “discretionary” spending (which excludes interest payments, for example)—and more on infrastructure, education and health. Mr Yudhoyono’s previous finance minister, Sri Mulyani Indrawati, made a start on this. But she has since left to join the World Bank, apparently sacrificed in the interests of coalition politics after a tiff with Aburizal Bakrie, a leading businessman, party leader and former cabinet member.

Rather than use his party’s parliamentary numbers to push through reform, Mr Yudhoyono has stuck with a timid consensus style, building a bigger, weaker six-party coalition than he needs. Four of his smaller coalition partners have Islamic roots. To foster some Islamic credentials of his own, perhaps, the president has seemed disappointingly slow to stand up for greater religious tolerance. His government seems especially reluctant to stamp out violence by the “Islamic Defenders’ Front”, or FPI, a group of thugs with religious pretensions and a record of bloody intimidation against Christians, Muslims of the Ahmadiyah sect and others. And allegations of brutality by the security forces against secessionists in Papua—backed by a gruesome video this week that appeared to show suspects being tortured—suggest that the army has not shed the bad habits it developed in East Timor and Aceh. No senior member of the armed forces, in which Mr Yudhoyono was once a general, has been convicted for abuses carried out under Suharto or since.

Meanwhile, the president is jeopardising one of his most popular traits: hard-earned credentials as a warrior against corruption. Some of the big fish netted in his first term by a feared anti-corruption commission, the KPK, have been freed early. They include the father of Mr Yudhoyono’s daughter-in-law. Accounts of a VIP’s life in an Indonesian jail anyway make it sound more like a four-star hotel chain than a chain-gang. Worse, no action has been taken against those in the police and the attorney-general’s office found to have fabricated evidence last year in a witch-hunt against KPK officials. The president seems sincere in his abhorrence of corruption, but unwilling to take on vested interests threatened by the anti-graft drive.

Saving graces

Still, Mr Yudhoyono has two big things going for him. First, he may be a Suharto-era general, but he is no Suharto-style dictator. Rather, he practises what the Harvard report calls “collusive democracy”, preferring co-option and consensus to competition. Second, he stands far above any potential successor. As bellicose rival politicians rattled their kris in a recent fishing row with Malaysia, he was statesmanlike and calm. Assessing his presidency this week the Jakarta Post, a liberal English-language newspaper, expressed a hope for better things in the four years he has left in office. But for now, the Post’s disappointed verdict on his tenure is about right: “The president who didn’t mess it up.”